Capacity shortage forces retailers to penalize late deliveries

Kroger Company has become the most recent retailer to impose fees on late deliveries

in a further sign of tightening US freight capacity. The company will charge an accessorial fee of $500 for deliveries that arrive more that 2 days late. This move follows Wal-Mart’s similar mandate this past summer when it began to enforce a policy of charging suppliers for late deliveries. Kroger claims that it loses ten percent of sales due to items that are out of stock because of late delivery, spoilage, and other factors that are caused by inefficiencies in the supply chain. The company says it cannot afford this unnecessary expense, especially at a time when online competition is squeezing margins.

The new resurgence in passing along some of the liability for lost revenue to shippers in the form of assessorial fees could provide an impetus for the implementation of new technologies across the supply chain for agricultural producers and carriers.

One example is blockchain technology which will provide transparency in supply chains for purposes of tracking shipments. Smart contracts will lay out the agreements between shippers, carriers, intermediaries, and customers by instantaneously assessing chargebacks and post-charges, settling payments, and keeping tabs on freight ownership.

Another spin on the issue could be on-time freight insurance. As FreightWaves reported earlier this year, European insurance giant AXA has begun to offer insurance policies that protect supply chain participants against late-arriving cargo flights. So far no companies offer this product in the US but it certainly is possible that this model could be utilized in the trucking freight industry in the US.